Why increasing customer lifetime value matters for merchants 

LTV — how much total monetary value a customer creates throughout their relationship with a merchant — is an increasingly important metric as brands focus on building loyalty. It helps merchants gauge the “stickiness” of their relationships: How much are they spending to acquire customers? How well are they retaining them, driving repeat purchases and growing the total expected revenue generated from each customer? In a market where customer acquisition costs are rising, maximizing LTV is more important than ever. 

Merchants can increase LTV in various ways. Here are three:
 

Creating a seamless and secure buying environment can help increase LTV. Consumers want protection without too much friction: 77% would prefer a secure online purchase experience over a speedy one, yet 28% have abandoned a transaction because it took too long to enter their details. Merchants need to strike the right balance — reducing fraud while keeping checkout fast and easy.

Less fraud can mean fewer false declines, when cardholders have their card denied unnecessarily upon checkout. This can happen due to fraud models that are too restrictive or that rely on inaccurate or imperfect information about that cardholder’s past transactions.  

False declines can cause consumers to abandon their shopping cart, often never to return. So, how do you reduce them, prevent fraud and increase card authorization rates — and ultimately boost LTV?  

Solutions that notify merchants immediately when a customer disputes a charge allow them to take actions that avoid the need for a chargeback — like stopping and refunding an online order or contacting the customer directly.  

This can also improve cardholder authorization rates by ensuring only true fraud-related disputes get coded as fraud, helping reduce false declines that may discourage future purchases from that merchant. Even small improvements in authorization rates can have a significant impact on a merchant’s revenue and bottom line.
 

Merchants can lose significant revenue from disputes and chargebacks — while potentially losing valuable customers along the way. Transaction confusion is a major driver: 48% of consumers have disputed at least one charge they later realized was legitimate, according to our 2026 research with Datos Insights.  

While having customer-friendly return and exchange policies can build loyalty and prevent chargebacks, digital tools can also help. For example, providing more insight into customers’ purchase details in their digital banking channels, like a clear merchant name, logo or itemized receipt, can help jog their memory. Putting this purchase information at consumers’ fingertips can significantly reduce the risk that they will dispute legitimate, non-fraudulent transactions because they do not recognize them.  

For issuers, those same purchase insights help reduce the operational burden of managing chargebacks, while supporting stronger cardholder engagement and long-term customer value. 

Enhancing the customer experience has taken on even greater importance as consumers have more choices and more willingness to switch brands. Merchants can improve their digital experience by giving customers more self-serve options and making purchases — and managing those purchases — easier.  

For example, offering subscriptions that give customers recurring access to the products and services they love — and then providing tools that make those subscriptions easy to manage. Almost 80% of consumers are more willing to sign up for a subscription if it is easy to pause or cancel. And 64% are more likely to subscribe if they’ll be able to manage it through their banking app. 

Providing detailed digital receipts through banking apps can also improve the customer experience. Itemized receipts can reduce transaction confusion that often leads to unnecessary disputes and chargebacks, while also providing customers with merchant contact information in case they have a question or concern. Two in three consumers say they would dispute fewer transactions if more purchase details were displayed in their banking apps.